KRA to Tax Small Traders per Product

The taxman intends to begin opening containers to calculate taxes item by item in a move that will affect small traders who import in bulk and pay taxes per kilogramme.

The Kenya Revenue Authority (KRA) will unbundle goods in yet another attempt to collect more taxes from small traders, with individual traders expected to pay taxes for each item they ship into the country.

It means that these items will now be subject to import duties, Value Added Taxes (VAT), excise duty, import declaration levy (IDL), and Railway Development Levy if they end up in open-air markets like Gikomba and Nyamakima (RDL).

This will raise the price of consolidated cargo, which currently carries a duty of Sh200 per kilogramme for air cargo and Sh2.2 million for a 40-foot container brought in by sea.

Consolidators charge traders Sh896 ($7) per kilo of cargo transported by air and Sh640 ($5) for cargo shipped by sea.

This comes at a time when traders are already dealing with high import costs caused by the shilling’s depreciation.

The change is one of the measures through which President William Ruto’s administration hopes to unlock billions of shillings in tax revenues as it aims to collect up to Sh3 trillion in the coming fiscal year.

The taxman believes that these levies do not reflect the true value of this trade, despite the fact that imports into the country have increased dramatically over the last decade.

Kenya is a signatory to the World Trade Organization’s (WTO) General Agreement on Tariffs and Trade (GATT) in terms of import valuation, according to the KRA.

“KRA further applies minimum test yields in the assessment of imports to avoid unfair competition and forestall tax evasion. It is important to note that undeclared/concealed items are assessed and subjected to additional taxes,” said KRA Customs and Border Control Commissioner Pamela Ahago

“KRA continues to address issues of concealment and undeclared items through ports of entry to ensure everyone pays their fair share of taxes.”

Small traders can now begin paying import duties ranging from 0% for raw materials to 10% for intermediate goods and 25% for finished products.

The majority of small traders import finished products from China and Dubai, which means they will face a 25% tariff.